History and Economy of Libya

The official name is the Socialist People’s Libyan Arab Jamahiriya (Al-Jamahiriya al-Arabiya al-libiya ash-shaabiya al-ishtiraqiya al-uzma). Check cancermatters for political system of Libya.

Located in North Africa. The area is 1760 thousand km2, the population is 5.37 million people. (2002). The official language is Arabic. The capital is Tripoli (2.27 million people, 2001). Public holidays – Revolution Day on September 1 (since 1969), Jamahiriya Proclamation Day on March 2 (since 1977). The monetary unit is the Libyan dinar (equal to 1000 dirhams).

Member of the UN (since 1955), Arab League (since 1953), AU (since 1963).

History of Libya

The first mention of early state formations (unions of Berber tribes) in modern Libyan territory in Egyptian sources date back to the 2nd half. 3rd millennium BC From the 7th c. BC. in the north of the country, the “colonial powers” of antiquity competed: Greece, Carthage, Rome. To the south was the original kingdom of the Garamantes, a people probably formed by the Berbers and descendants of people from the countries of the Aegean. Garamantida, independent or dependent on Rome, existed for more than a millennium and a half before the Arab conquest in 642-43. After the collapse of the Roman Empire, Libya experienced invasions, confrontation between feudal monarchies, religious and political associations of Arab and Berber tribes. From Ser. 16th century until 1911-12, the Ottoman Empire established itself here, whose power was limited to the coast and a few cities with the immediate environs inland. To the beginning 1930s after a long resistance, the country was occupied by Italy; at the end of the 2nd World War came under the control of the British and French military administrations until 1951, when it became an independent kingdom. After the revolutionary coup on September 1, 1969, young officers, led by the hitherto undisputed leader Muammar al-Gaddafi, overthrew the monarchy and proclaimed Libya a republic, and from March 1977 it became a “jamahiriya” (from Arabic “mass character”), or “state of the masses”.

Economy of Libya

GDP at purchasing power parity of the currency is $40 billion, and per capita is $7,600 (2001). Sectoral structure (estimated in 1997, %) by contribution to GDP (in brackets – by employment): agriculture, forestry and fisheries – 7 (17), industry and construction – 47 (29), services – 46 (54).
The economically active population is 1.5 million people, unemployment is 30%, although the most significant contribution to the latter figure is made not so much by indigenous Libyans as by immigrant workers (2000). Inflation in 2001 13.6%, in 2002 1.9% (estimate).

The dominant role in the Libyan economy is firmly held by the oil and gas industry (in 2001, about 68 million tons of oil were produced). Its contribution to gross industrial output (together with capital construction) exceeds 57%, while its contribution to current foreign exchange earnings is 98%, and to state budget revenues 75%.

It was thanks to the spasmodic growth of these incomes that the Libyan state in the 1970s and 80s. generously funded extensive development plans. Their main successes were reduced to the expansion and modernization of the economic and social infrastructure, oil refining complexes (the annual capacity of installations for its direct distillation is up to 17.4 million tons) and gas, mainly export-oriented, the creation of centers for the production of basic, large-tonnage products of organic chemistry (polyethylene, polyvinyl chloride, urea, etc.). Other industrial sectors (production of consumer goods for the domestic market, assembly of agricultural, construction, and automotive equipment) depend on the import of foreign equipment, raw materials, components, and often on foreign labor. Despite the sharp drops in revenues from oil and gas in the 2nd half.

The development of the Libyan agricultural sector is hampered by a shortage of agricultural land, the depletion and salinization of natural sources of fresh water and its underground reserves on the coast, as well as the massive migration of indigenous villagers to cities. The harvest of the main crop production in 2000 was (thousand tons): barley – 70, wheat – 160, potatoes – 209; other products of vegetable growing and horticulture in 1998: olives – 190, tomatoes – 158, onions (dry) – 180, watermelons – 210, dates – 130, citrus fruits – 66. – 21, mutton and lamb – 37, poultry meat – 98, cow’s milk – 100, sheep’s milk – 40) and fishing (in 1997, the total catch by live weight was measured at 32.7 thousand tons, which almost entirely fell on the coastal zone Mediterranean Sea – 32.3 thousand tons). However, by the beginning 21st century demand for agricultural products, especially food, was met by 75-80% through imports.

There have been no operating railways since 1965. The length of motor roads in 1996 (thousand km): total – 24.5; including main (presumably with a hard surface) – 6.8; secondary (ground) – 17.7. By 2002, the main pipeline routes in the oil and gas sector of the economy reached the following length (thousand km): oil pipelines – 4.8, gas pipelines – approx. 2 (including 256 km for LPG transportation). The largest and most expensive Libyan transport project of the 20th-21st centuries: the “Great Man-Made River” – a system of water conduits with unique technical solutions (out of five planned, there are two of its stages with pipes up to 4 m in diameter, with a total length of about 2510 km and a capacity of up to 4.5 million m3 of water per day) from natural underground freshwater reservoirs in the interior of the Sahara to cities,

The main seaports are Tripoli, Benghazi, Marsa el-Bureika, Misrata, Tobruk, el-Homs, Ras al-Anuf, Zuwara, Derna. International maritime transportation (1993, thousand tons): loading – 62,491; unloading – 7808. In 1999, the throughput of ports, in addition to oil terminals, was 15 million tons.

In 2001, there were 136 airports, incl. 58 – paved runways. In 1995, civil aviation aircraft flew 3 million km on regular routes; 623 thousand passengers were transported, their flow amounted to 398 million passenger-km; cargo traffic – 32 million tkm.

In 1998, the telephone network consisted of (thousand subscribers): main lines – 500, mobile communications – 20. In 2002, there was 1 Internet provider, and the number of users in 2001 was estimated at 20 thousand.

In 1998, the total number of tourists arriving amounted to 850.3 thousand people.

Within the framework of liberal, but strictly limited economic reforms, cooperative forms of ownership, private industrial, commercial and banking activities are encouraged, denationalization processes continue, some Libyan manufacturing enterprises are corporatized and privatized, sometimes large ones – for example, a metallurgical plant in the city of Misrata. The development of natural resources alternative to oil and gas, the achievement of food self-sufficiency, sectoral and territorial diversification, the accelerated development of the country’s interior regions and other activities with broad involvement of private investment in their implementation are invariably put forward as the most important goals of the national socio-economic strategy. The Libyan leadership declares its readiness to open the door for foreign investment (at the first stage, mainly in the tourism sector). In 1997, the Law on Foreign Investments was adopted, which also provides for attracting investments in other sectors: engineering, agriculture, health care, consumer services, and others at the discretion of the government. Projects implemented under the mentioned law are guaranteed a number of “standard” privileges in the world practice. However, neither moderate liberalism, nor privatization, nor the revival of small and medium-sized private businesses almost in any way affects key industries, primarily the oil and gas industry, as well as the main types of foreign economic activity, including export-import, monetary and financial, other operations and contracts,

Since January 2002, measures have been taken to unify the exchange rate of the national currency (to abandon the system of multiple rates): the Libyan dinar was devalued by 51% against the US dollar, and at the same time, customs duties on most imported goods were reduced by 50% to compensate for the bulk of their consumers the negative consequences of currency regulation – in line with the general course towards financial recovery, curbing inflation and stimulating foreign investment.

The state budget, according to estimates for 2001, was reduced to a small surplus (in billion dollars) – 0.1, with revenues – 9.3 and expenditures – 9.2, including current and capital. A longstanding serious problem remains the inefficiency of most costs, of which approx. 60% is accounted for by the salaries of civil servants.

The average national income per capita in Libya is higher than in any other African country. This allows the state to finance free health care, education, a significant part of the housing stock and other social services at a relatively high level and maintain the continental championship in most components of the quality of life. True, only a small share of these benefits extends to numerous foreign workers.

Due to the high situation on the world markets for hydrocarbon raw materials and products of its primary processing after 1999, the conditions and financial results of foreign economic activity were favorable (billion dollars): exports – 13.1, imports – 8.7, trade surplus – 4.4, foreign liquid assets (excluding gold reserves) – 14.8, external debt – 4.7 (2001). The value of Libyan exports is dominated by crude oil, partly also includes oil products, natural gas and chemicals. Traditionally, the main import items were machinery, equipment and vehicles, foodstuffs, industrial consumer products. The dominant role among the Libyan foreign economic partners is played by Italy, Germany, Great Britain, France, Spain, Japan, South Korea, which account for approx.

Economy of Libya